HGCapital Trust PLC · LSE:HGT
HGCapital Trust — FY2021 Earnings Presentation
23 slides from HGCapital Trust's earnings presentation, March 2022
Slide 1: 2021 Full year results: Get connected
HgCapital Trust plc 2021 Full year results Get connected To the 2nd largest software business in Europe This document accompanies the Annual report to 31 December 2021. The information in this document contains a summary of March 2022 information set out in this report. Reference should be made to t
Slide 2: HGT overview: Consistent long-term compounding growth
HGT overview: Consistent long-term compounding growth FTSE 250 investment company listed on the LSE Direct investor only committed to Hg funds A Board of 6 NEDs with a wide range of skill sets and strong focus on strategy and governance who make all decisions on commitments to Hg funds Managed by Hg
Slide 3: Key financials for 2021: The power of a long-term investment strategy
Key financials for 2021: The power of a long-term investment strategy +44% £2.0bn 18% NAV per share and 19% share price CAGR over the past 10 years NAV per share (440.5p) Net assets v. 8% CAGR from the FTSE All-Share 31 December 2020: +24% 31 December 2020: £1.3bn generated from consistently strong
Slide 4: Managing liquidity – levers in place
Managing liquidity – levers in place Available liquid resources (23% of NAV) £470m including an undrawn bank facility of £99m New equity raised over 2021 £141m via tap issuance Cash returned to HGT over 2021 £271m through exits and refinancings Invested on behalf of HGT over 2021 £424m including 16
Slide 5: Trading performance
Trading performance Average EBITDA growth of the top 20 portfolio companies was 28% over the last 5 years 35% 31% 30% 27% 16% 27% 25% 24% 22% 14% 2017 2018 2019 2020 2021 LTM sales growth LTM EBITDA growth 70% of the 2021 increase in unrealised valuation was driven by trading Note: Top 20 - Based on
Slide 6: Returning cash to HGT with significant realisations at uplifts to book value
Returning cash to HGT with significant realisations at uplifts to book value Average uplift to Average multiple of Average gross IRR book value over 2021 cost over 2021 over 2021 2.4x 30% 40% In the past 10 years Hg has realised 57 investments with an average uplift to valuation of 30% Past performa
Slide 7: HGT is Hg's largest client, committed to all Hg funds
HGT is Hg’s largest client, committed to all Hg funds Pension Plans, SWFs, Endowments, Insurance Cos etc c. $40bn Hg’s portfolio Hg’s largest companies LP investor HGT’s underlying HGT provides listed listed investor access to “the free base c. £3bn float” of the $102bn EV of Hg Software “Inc” HGT p
Slide 8: 'Hg Inc' is the #2 largest tech firm in Europe
‘Hg Inc’ is the #2 largest tech firm in Europe If quoted, Hg would be a Generated consistent returns of $176bn +1% FTSE 100 >30% IRR $102bn company for 15 years +24% Growing revenues and profits at c.20% CAGR, $80bn 2x-3x +8% the rate of comparable quoted companies $35bn +25% $15bn $15bn $13bn $11bn
Slide 9: Returns have been driven primarily from growth in the underlying portfolio companies
Returns have been driven primarily from growth in the underlying portfolio companies All Hg Software and Services aggregated exits to date (2001-2022) © Copyright Hg 2022 9
Slide 10: European base, global reach
European base, global reach As at 31 December 2021, including including all announced transactions post period © Copyright Hg 2022 10
Slide 11: Single strategy across three funds - broad market coverage
Single strategy across three funds - broad market coverage Entry EV €1,500MM €500MM €100MM Company maturity COMMON FEATURES Shared Investment Benefit from c. 50 person Identical investment Dedicated execution teams Integrated origination and Committee and transaction support and strategy per fund co
Slide 12: Targeting robust and resilient 'Hg sweet-spot' business models
Targeting robust and resilient ‘Hg sweet-spot’ business models BUSINESS MODEL ATTRIBUTES DEEP SECTOR KNOWLEDGE… Tax & Accounting Business critical need delivered as software or service ERP & Payroll Legal and Compliance Subscription or repeat revenue model Automation and Engineering SWEET Insurance
Slide 13: A focused 'Hg Cluster' approach
A focused ‘Hg Cluster’ approach has driven deep sub-sector knowledge As at 31 December 2021 © Copyright Hg 2022 13
Slide 14: Via deep functional expertise and IP, we drive repeatable value
Via deep functional expertise and IP, we drive repeatable value across our portfolio – from founder-led companies through to mature and scaled ones Growth Technology Data & Analytics Business Sales org and GTM DWH, BI Predictive systems and Cyber Example processes strategy dashboards models infra pr
Slide 15: Driving collaboration across our portfolio
We also deliver value by systematically driving collaboration across our portfolio Community… …working together to drive value Inter-company collaboration Azets was Silverfin’s first UK client; helped Azets drive 30% efficiency in Accounts Prep Product partnerships Active Members IRIS and Dext’s par
Slide 16: Responsible Investment
Responsible Investment AA+ + UNPRI rating 100% carbon neutral since 2019 48%female 35% women in Hg’s 45% of investment executive hires 31 nationalities represented employees executive team were female in 2021/22 across Hg >$8.5m committed to date Our purpose: Trusted to improve the future of million
Slide 17: Summary and outlook
Summary and outlook Against the backdrop of COVID-19, Hg’s portfolio has performed well The overall portfolio valuations were up over 52% for the year to 31 December 2021, returning over £4 billion of liquidity to Hg investors, including £271 million to HGT We are excited about the potential of our
Slide 18: Appendices
Listed access to the 4th largest software business in Europe December 2019 Appendices © Copyright Hg 2022 18 18
Slide 19: Global team of over 280 staff across three offices
Global team of over 280 staff across three offices © Copyright Hg 2022 19
Slide 20: Large and well-resourced investment 'machine'
Large and well-resourced investment “machine” As at 31 December 2021 © Copyright Hg 2022 20
Slide 21: Contact
Contact For further information on HgCapital Trust plc, please visit our website: www.hgcapitaltrust.com Or contact our Investor Relations Team at: investorrelations@hgcapitaltrust.com Laura Dixon Hannah Brown +44 78 2459 2894 +44 20 8078 9144 You can also follow us: Linkedin at www.linkedin.com/com
Slide 22: Disclaimer
Disclaimer NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, INTO OR WITHIN THE UNITED STATES OR TO “US PERSONS” (AS DEFINED IN REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR INTO OR WITHIN AUSTRALIA, CANADA,
Slide 23: Disclaimer
Disclaimer These materials include statements that are, or may be deemed to be, "forward-looking statements" which are based on current expectations and projections about future events. In some cases, these forward-looking statements may be identified by the use of forward-looking terminology, inclu